Tuesday of this week Finney Law Firm attorneys Isaac T. Heintz and W. Z. “Dylan” Sizemore¬†present “5 Pillars of Success” for the Anderson Chamber of Commerce.

The course addresses the foundations of business success through carefully establishing and planning the success of your business with legal strategies in corporate law, real estate law and estate planning.

A video of the course will soon be available on line.

When drafting leases, contracts and other agreements, frequently my client informs me that a key provision has been negotiated or an impasse has been resolved by making an agreement to negotiate an agreement later.

For example, the question the parties have is: “what is to be the lease rate upon a renewal in five years?” ¬†Or, “what will be the location of a utility easement across land of the seller to serve new property being acquired by the buyer?” ¬†And the answer the parties provide is: “will be negotiated at that time” or “we will decide at a later date.”

These answers are, of course, not answers at all.  And they constitute no agreement at all, for what if the parties fail to agree?

In the lease scenario, five years goes by, and the tenant exercises a renewal option subject to a “will negotiate the rental¬†rate later” provision. ¬†Then, the parties negotiate and cannot come up with an agreement. ¬†Is the renewal effective? ¬†If so, at what rate? ¬†If the parties don’t set some sort of procedure (e.g., an appraiser will decide the rate) or some sort of benchmark (e.g., applying CPI inflation rate since the signing off the lease). ¬†The “agree to something later” formulation is the recipe for conflict if not disaster.

In the easement scenario, the seller agrees to provide water, sanitary sewer and electricity easements¬†after the closing on the property being sold, at a location to be decided between the parties. But what if the seller offers access only at a location costly and inconvenient to the buyer? ¬†What if the buyer demands access in a location that makes the remainder of seller’s property undevelopable? ¬†Again, without some procedure (a neutral third party will arbitrate disputes) or benchmark (as close to the east property line as practical), the agreement to provide agreed utility easements at a later date is a hallow promise and an illusory contract.

Now, if the parties trust one another, have a history of getting along, or have economic motivations to cooperate, it may make sense for parties to an agreement to “agree to agree later,” but don’t labor under the illusion that the agreement reached is in itself meaningful, binding or clear.




There are many law firms in greater Cincinnati, some special-purpose and some full-service, and there are many title insurance companies, commercial- and residential-focused.

But as a lender, as a consumer, as an investor, as a Realtor, what are the advantages to having a robust title insurance company coupled with a full-service law firm?  We think there are several.

  • First, from a real estate transactional perspective, we offer significant depth of experience and breadth of services to residential and commercial buyers and sellers, as well as lenders: closing and title services, leases, seller financing documents, and post-occupancy agreements.¬† We also can handle zoning and regulatory matters relating to your property.
  • Our litigators can vigorously litigate to enforce the contracts that we write and that you sign, or defend against such actions.
  • We can handle sophisticated matters relating to bankruptcy, probate administration,¬†and the business components of a real estate transaction.
  • Finally, our property tax valuation team can assure you are not paying more in taxes than the law requires.

We strive to produce the same high-quality product and responsive customer service¬†across each practice area of the Finney Law Firm and with Ivy Pointe Title.¬† We invite you to let us show you how we can “make a difference” in your¬†real estate matters.

In contracts, leases, loan documents and other agreements, we frequently see a request that one party indemnify the other against certain occurrences.

As a simple and general proposition, indemnity provisions¬†are ill-advised for the¬†indemnitor. ¬†They are open-ended access to one’s¬†checkbook for all sorts of claims, and are usually accompanied by a duty to defend against those claims (i.e., pay for¬†an attorney to defend a suit), whether meritorious or frivolous. ¬†Thus, a short indemnity paragraph could lead to hundreds of thousands or millions of dollars of unexpected and unintended liability. ¬†As a rule: Not a good idea.

Taking this concept over into the world of real estate sales, as is explained in this blog entry, Real Estate 101: Types of Deeds in Ohio, when a seller executes and delivers a warranty deed in Ohio (General Warranty Deed or Limited Warranty Deed), he is essentially providing an open-ended indemnification to a buyer of that property — and his successors¬†down the chain of title¬†— against certain title claims. ¬†Among other things, a warranty covenant is a promise to defend against certain¬†claims to the title from a third party.

Ohio Courts have ruled that the failure to provide that defense will mean the grantor must pay the attorneys fees of the grantee to so defend the title.  Hollon v. Abner, 1997 WL 602968 (Ohio App. 1 Dist., 1997).

Thus, although it is “standard operating procedure” in real estate transactions to provide a warranty deed, sellers may want to re-think that (starting with the signing of the contract as that instrument dictates what form of deed is required at the closing) and understand their open-ended exposure from a warranty deed.

While Ohio law allows individuals to represent themselves in court (pro se), non-lawyers may not represent others. This prohibition extends to non-lawyers who are the sole member of a limited liability company or sole shareholder of a corporation.

While for many small businesses there may seem to be no distinction between the sole shareholder/member and the entity itself, the law recognizes the distinction ‚Äď indeed such recognition is the foundation of corporate existence ‚Äď and it is important to recognize and respect that same distinction.

We recently handled a case involving two defendants, both of which were limited liability companies. The statutory agents for both defendant entities were non-lawyer members of the respective companies (perfectly legal and acceptable); and the statutory agents for both companies attempted to make “pro se” filings in the case. These filings were stricken by the Court, and treated as if neither defendant had appeared or answered the complaint in the case. Ultimately, the judge entered default judgment in our client’s favor and against the defendants.

Further, the Ohio Supreme Court has held that such attempted “pro se” representation warrants civil fines and sanctions for “unauthorized practice of law.” See Disciplinary Counsel v. Kafele, 843 N.E.2d 169, 174, 108 Ohio St.3d 283, 288, 2006 -Ohio- 904, ¬∂ 20 (Ohio,2006), finding a $1,000.00 fine appropriate where a non-lawyer member of an LLC made filings and attempted to represent the LLC in a lawsuit, and¬†¬†Cleveland Metro. Bar Assn. v. McGinnis, 137 Ohio St.3d 166 (Ohio,2013) assessing a $6,000.00 fine for such¬†unauthorized practice of law.

If your small business has a legal issue, hire an attorney to make sure you and your business are protected.

High-income taxpayers need to be aware of the Net Investment Income Tax (NIIT).  The NIIT is a tax passed in 2010 to help pay for the Affordable Care Act, a.k.a. ObamaCare.  Below is a summary of the NIIT, and a few planning opportunities to consider to avoid/minimize NIIT.

The NIIT applies at a rate of 3.8% to certain net investment income of individuals, estates, and trusts that have income above certain thresholds.  The NIIT went into effect for tax years beginning on or after January 1, 2013.

Individuals will owe the tax if they have Net Investment Income and also have modified adjusted gross income over the following thresholds:

Filing Status Threshold Amount
Married filing jointly $250,000
Married filing separately $125,000
Single $200,000
Head of household (with qualifying person) $200,000
Qualifying widow(er) with dependent child $250,000


At this time, the threshold amounts are not indexed for inflation.

In general, estates and trusts are subject to the NIIT if they have undistributed Net Investment Income and also have adjusted gross income over the dollar amount at which the highest tax bracket for an estate or trust begins (for tax year 2014, this threshold amount is $12,150).

In general, investment income includes, but is not limited to: interest, dividends, capital gains, rental and royalty income, non-qualified annuities, income from businesses involved in trading of financial instruments or commodities, and businesses that are passive activities to the taxpayer (meaning the taxpayer does not ‚Äúmaterially participate‚ÄĚ in the business). ¬†To calculate your Net Investment Income, your investment income is reduced by certain expenses properly allocable to the income.¬†

To the extent that gains are not otherwise offset by capital losses, the following gains are examples of items taken into account in computing Net Investment Income: (i) gains from the sale of stocks, bonds, and mutual funds; (ii) capital gain distributions from mutual funds; (iii) gain from the sale of investment real estate (including gain from the sale of a second home that is not a primary residence); and (iv) gains from the sale of interests in partnerships and S corporations (to the extent the partner or shareholder was a passive owner). 

The NIIT does not apply to any amount of gain on the sale of a personal residence that is excluded from gross income for regular income tax purposes.

In order to arrive at Net Investment Income, Gross Investment Income (items described in items 7-11 above) is reduced by deductions that are properly allocable to items of Gross Investment Income.  Examples of deductions, a portion of which may be properly allocable to Gross Investment Income, include investment interest expense, investment advisory and brokerage fees, expenses related to rental and royalty income, tax preparation fees, fiduciary expenses (in the case of an estate or trust) and state and local income taxes.

Some planning opportunities to consider to help avoid/minimize the NIIT include: (i) receiving the purchase price from a sale of your closely held business or real estate over more than one year; (ii) generating losses to offset gains; (iii) renting property to your business; (iv) lending money to your business; and (v) take an active role in your closely held business.